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DS Global Forum
Gerald R Ford School of Public Policy ** Integrated Policy Exercise ** January 2003
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A Gerald R Ford School of Public Policy ** Integrated Policy Exercise ** January 2003
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AIDS-Fighting Fund Has Yet to Donate --- Demands by U.S., Others For New Delivery System Delays Flow of Money
Asian Wall Street Journal New York, N.Y. Aug 6, 2002 -------------------------------------------------------------------------------- Authors: By Michael M. Phillips Pagination: A7 ISSN: 03779920
Abstract: The U.S. pledged $500 million to the global AIDS fund, but the administration insisted, joined by Britain and some other donors, the fund shun existing aid agencies and build its own system. That means it has to line up its own procurement, administrative, auditing and other services in each country for each grant. Dr. [Richard Feachem] and U.S., British and many other donors say the fund is making quick progress for a new aid program. Nonetheless, tension has emerged among donors and recipients over how fast to go, versus how careful to be. "There's simply a higher level of attention being paid, and it's [angering people] who are used to having large amounts of money given to them," said the U.S. official. "Some of the Europeans don't feel as strongly about that, they just dish the money out." Initially, despite U.S. discomfort, the fund tried to negotiate with the World Bank, the world's largest economic-development lender, to take responsibility for the money and its use. Bank officials, however, refused to accept that role unless they also had input into how the projects were selected and implemented, a condition unacceptable to the fund and the U.S. The issue is still in limbo, but for the moment the bank has agreed only to hold the fund's money and wire grants to the recipients the fund designates. Copyright Dow Jones & Company Inc Aug 6, 2002 Full Text: WASHINGTON -- A highly publicized fund set up at the behest of the United Nations has raised $2.1 billion to fight AIDS and other infectious diseases in the developing world. It has announced $1.6 billion in grants aimed at life-saving projects in 40 countries. But it has yet to give away a single penny. That is largely because of demands led by the administration of President George W. Bush that the new fund set up a world-wide aid-delivery system from scratch, instead of relying on established agencies the administration distrusts, such as the U.N. and World Bank. The Global Fund to Fight AIDS, Tuberculosis & Malaria was created in January in response to U.N. Secretary General Kofi Annan's call. Its establishment stirred great hope that rich countries would finally spend enough money to defeat diseases that together kill six million people a year, mostly in developing countries in Africa and elsewhere. Now, however, it is caught in a dilemma between poor nations' need for immediate help and donors' antipathy toward agencies set up to provide it the fastest. Tanzania, for example, was promised $25 million for AIDS and malaria projects in April when the first round of grants was announced. "We're now awaiting a reply from them as to when we can have these funds," says Maj. Gen. Herman Lupogo, head of the Tanzanian Commission for AIDS. "We needed them yesterday." It is a quandary that exemplifies the pros and cons of the Bush administration's war on what it considers wasteful foreign aid. The administration is openly dubious that past aid funneled through established agencies has had any positive effect, a topic Treasury Secretary Paul O'Neill repeatedly stresses, including during his much-ballyhooed African jaunt with Bono, the rock star. The Bush administration vows to resist any efforts to increase foreign assistance unless it can deliver quick, measurable improvements in the lives of the poor and sick, and it repeatedly has placed conditions on U.S. largess toward that end. The Treasury Department promised $300 million in extra funds for the World Bank's loan program for the poorest nations, but only if it can demonstrate results. President Bush proposed a $5 billion-a-year aid fund aimed strictly at countries that can meet objective standards for economic and political reforms. The U.S. pledged $500 million to the global AIDS fund, but the administration insisted, joined by Britain and some other donors, the fund shun existing aid agencies and build its own system. That means it has to line up its own procurement, administrative, auditing and other services in each country for each grant. "I can't tell you how much resistance we've had to this" from some global-fund recipients and donors, said one senior U.S. official. "We're anxious for quick victories, [but] better that it be done right and later, than early and wrong." The fund and its backers face mounting pressure to get the money flowing. Some 40 million people world-wide carry the virus that causes AIDS; an additional 20 million have died of the disease since it first surfaced in the 1980s, and a quarter-million more are dying each month. The spread of the AIDS virus has made vast numbers of people in the developing world and former East Bloc nations more vulnerable to TB, which claims two million lives a year. And as many as 500 million people contract malaria annually. The fund approved 58 project applications in its first round. Among the winners are a Nigerian campaign to widen access to AIDS drug cocktails and a Tanzanian project to increase the use of bed nets impregnated with insecticide to combat malaria. Another approved project is an effort in Madagascar to promote the use of condoms, mosquito nets and other health-related items by using marketing techniques and local retailers such as street vendors and market stalls. Although the fund has a new executive director, Richard Feachem, it is still advertising for many senior positions, another holdup in distributing funds. "Of course the recipients are impatient, they want to get started," says Dr. Feachem, on leave from his post as director of the Institute for Global Health at the University of California. "Equally, the countries are understanding that we have to put new arrangements in place." Dr. Feachem hopes to get money to a handful of projects by the time his board next meets in October. Even that goal remains up in the air. The vast majority of grant winners probably won't see any funds until year end, if not later. "I don't see any justification for that kind of excess precaution," says Milly Katana, a Ugandan AIDS activist who represents private charities on the fund's board. "Personally I don't want to just light the money on fire and burn it, but at the same time lives are being lost." Dr. Feachem and U.S., British and many other donors say the fund is making quick progress for a new aid program. Nonetheless, tension has emerged among donors and recipients over how fast to go, versus how careful to be. "There's simply a higher level of attention being paid, and it's [angering people] who are used to having large amounts of money given to them," said the U.S. official. "Some of the Europeans don't feel as strongly about that, they just dish the money out." The fund was set up as a Swiss foundation after a spat among donors early on; Italy and others were aligned against the U.S. and those who didn't want it run by either the U.N. or the World Bank. "We would have favored a stronger role for the World Bank in the whole disbursement procedure," says Claudio Spinedi, a senior aid official in the Italian Ministry of Foreign Affairs. Initially, despite U.S. discomfort, the fund tried to negotiate with the World Bank, the world's largest economic-development lender, to take responsibility for the money and its use. Bank officials, however, refused to accept that role unless they also had input into how the projects were selected and implemented, a condition unacceptable to the fund and the U.S. The issue is still in limbo, but for the moment the bank has agreed only to hold the fund's money and wire grants to the recipients the fund designates. The fund quickly set up a panel of technical experts who reviewed 300-plus applications and chose the first recipients. But the fund still has only a vague outline of how it will distribute money, monitor its use, and judge its effectiveness. Dr. Feachem promises that the fund's staff will number no more than 50, meaning it likely will have to hire outsiders to monitor projects in what could ultimately be 100 or more countries. According to the current plan, each project will involve: -- A principal recipient, perhaps a health ministry, local government, company or private charity, that will implement the project, assess its success and report its conclusions to the fund. -- A local fund agent such as an accounting firm, bank, or charity that will audit the money's use. The agent won't examine whether the project succeeds. -- A third independent agent that will periodically verify the principal recipient's assessment of the project's impact on public health. Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
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